Gold and Precious Metals

Second Post in a Two-Part Series on Recent OFAC Designations

As we blogged yesterday, OFAC has been busy.  Right before OFAC designated the virtual currency exchange SUEX for allegedly facilitating ransomware payments,  OFAC announced another significant but more traditional action on September 17, 2021 by designating members of a network of Lebanon and Kuwait-based

Second Post in a Series on the FATF Plenary Outcomes

As we blogged, last month the Financial Action Task Force (“FATF”) held its fourth Plenary, inviting delegates from around the world to (virtually) meet and discuss a wide range of global financial crimes and ongoing risk areas. Following the Plenary, FATF identified a number of strategic initiatives for future research and publication, and issued six reports to detail their findings on specific topics. One such report, Money Laundering from Environmental Crime (the “Report”), and its implications for anti-money laundering (“AML”) and countering the financing of terrorist (“CFT”), will be the focus of this post.

The 66-page Report is compiled from case studies and best practices submitted by over 40 countries, as well as input from international organizations like the International Monetary Fund and World Bank. While this Report is the first deep dive into environmental crimes and recommendations for members of the FATF Global Network, it is not the first time FATF has addressed environmental issues. The current Report aims to build upon FATF’s previous study on money laundering and the illegal wildlife trade, on which we also blogged. The current Report is also connected to earlier FATF studies on money laundering risks from the gold trade and the diamond trade.  Indeed, the Report references U.S. enforcement cases involving money laundering and gold or diamonds on which we previously have blogged (see here, here and here).

As this post will discuss, these areas of money laundering risk are often overlooked and are especially difficult to monitor. Further, the Report finds that “[l]imited cooperation between AML/CFT authorities and environmental crime and protection agencies in most countries presents a major barrier to effectively tackle [money laundering] from environmental crimes.”  Stated otherwise, government AML/financial flow experts and government environmental law experts don’t understand or even consider each other’s area of expertise, and often don’t communicate with each other, resulting in missed enforcement opportunities.  With global environmental crimes generating up to $281 billion per year, the Report suggests that government interventions are not proportionate to the severity of this issue. By issuing this Report, FATF hopes to raise awareness of the scope and scale of harm caused by environmental crimes and related money laundering, and enhance collaboration by financial crime and environmental crime enforcement officials.
Continue Reading FATF Issues First-Ever Report on Environmental Crime and Money Laundering

On June 23, 2021, the Department of Justice unsealed a criminal complaint and affidavit filed in the Southern District of Florida that alleges a vast scheme to launder money through illegal gold mining.  The DOJ charged Jesus Gabriel Rodriguez, Jr., the CEO and President of Transvalue, Inc., a South Florida-based armored car service, with one count of conspiring to commit money laundering.  The affidavit attached to the complaint alleges that Rodriguez conspired with employees of a South Florida-based gold refining company to import thousands of kilograms of illicitly-sourced gold from Curacao worth millions of dollars, and then use his company’s fleet of armored trucks to thwart the anti-money laundering (“AML”) program of a U.S. precious metals refinery receiving the gold.

As we have blogged, gold is an especially effective medium for money laundering because it has universal and readily ascertainable value and is difficult to trace.  Curacao, a Caribbean island with no gold mines, is commonly part of the route for gold illegally mined in, and smuggled out of, South America (including Venezuela) and Africa.
Continue Reading DOJ Charges Armored Car Service CEO for Elaborate Scheme to Launder Money Through Illegal Gold

In the past month, the Government Accountability Office (“GAO”), a non-partisan legislative agency that monitors and audits government spending and operations, has issued a series of reports urging banking regulators and certain executive branch agencies to adopt recommendations related to trade-based money laundering (“TBML”) and derisking. These reports underscore (1) the importance of TBML as a key, although still inadequately measured, component of money laundering worldwide, and (2) that the GAO remains interested in assessing how banks’ regulatory concerns may be influencing their willingness to provide services.

Taken together, the GAO’s recent activity signals that even in the face of unprecedented public health and regulatory challenges posed by COVID-19, the GAO still expects banking regulators and agencies alike to fulfill its prior commitments on other, unrelated topics.


Continue Reading Government Accountability Office Roundup: Recent Activity on Topics Related to Trade-Based Money Laundering and Derisking

On June 12, 2019, Kenneth A. Blanco, Director of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), provided remarks at the NYU Law Program on Corporate Compliance and Enforcement that underscored the agency’s evolving approach to emerging threats in money laundering and terrorist financing.

His remarks specifically focused on:

  • FinCEN’s approach to addressing a number of emerging money-laundering threats, including the crisis in Venezuela and the rise in business email compromise (“BEC”) fraud schemes;
  • The agency’s collaboration with Congress to address the need to collect beneficial ownership information at a company’s formation; and
  • FinCEN’s ongoing efforts to strengthen and modernize the anti-money laundering (“AML”) and counter terrorism financing (“CFT”) system.


Continue Reading FinCEN’s Evolving Approach to Lurking Threats in Money Laundering and Terrorist Financing: Director Blanco’s Remarks at NYU Law

On April 17, 2019, the United States Attorney’s Office for the Southern District of Florida (the “Government”) announced its non-prosecution agreement (available here) entered into with a Miami-based gold refinery, Republic Metals Corp. (“RMC”), related to the refinery’s failure to maintain a robust anti-money laundering (“AML”) program. RMC is the second American refinery whose AML program has been identified as deficient by the Government as part of its ongoing probe into gold imports from South American countries such as Peru, Bolivia, and Ecuador (dubbed “Operation Arch Stanton”). The Government’s decision to decline prosecution against RMC stands in stark contrast to its prosecution last year of another refinery, Texas-based Elemetal LLC (“Elemetal”), arising from the same probe.
Continue Reading Gold and Money Laundering